"Amazon but for X country" is increasingly on the horizon, but cash payments are holding them back, Axios' Erica Pandey reports.
- Why it matters: Because China leapfrogged credit cards and went straight from cash to mobile payments, e-commerce has boomed there. It accounts for 30% of all retail, compared to the 10% in the U.S.
The big picture: Serving populations that tend to rely on cash and live in harder-to-reach areas, the online retailers of the developing world are searching for creative ways to grow — and keep the international giants at bay.
- By 2020, the global e-commerce market is projected to hit $4.2 trillion, double its size in 2016, according to eMarketer.
- Asia's market, led by India, is expected to grow 25% this year.
- Latin America: 21%.
- Middle East and Africa: 21%.
Between the lines:
- In Africa, Jumia is dealing with homes that lack traditional addresses: "[I]f you say in a city in Africa, 'I live in the third street by the church with the blue door,' that’s the address," Jumia co-founder Sacha Poignonnec said in an interview with McKinsey.
- In Russia, Amazon equivalent Ozon deals with 40% of Russian e-commerce orders still paid for in cash upon delivery and another 20% paid with cards upon delivery.
- And in India, cash is still king, but giants like Amazon, Walmart and Alibaba are making massive investments in homegrown firms like Flipkart and Reliance Retail.
The bottom line: The developing world lags behind. But it's catching up.